Frigger v Trenfield

1. Mrs and Mr Frigger are discharged bankrupts whose bankrupt estates have not yet been finalised. They brought proceedings against their trustee in bankruptcy, Ms Kelly-Anne Trenfield seeking her removal as their trustee. They also sought orders to the effect that Ms Trenfield was not entitled to be reimbursed from their bankrupt estates for her costs of conducting various court proceedings. It was common ground in those proceedings that Ms Trenfield carried on her responsibilities as trustee as an employee of FTI Consulting (Australia) Pty Ltd. However, there were issues between Mrs and Mr Frigger on the one hand and Ms Trenfield on the other hand as to the nature of those arrangements and whether they had any consequences for Ms Trenfield's independence as a trustee or the propriety with which the estates were being administered, especially as to the involvement of FTI.
2. Shortly prior to dates listed for the final hearing of the proceedings, Mrs and Mr Frigger sought leave to discontinue the proceedings. At the time, they indicated that they intended to commence proceedings against FTI under the Australian Consumer Law relating to the conduct of the administration of their estates. Leave to discontinue was given on terms that included an order that they pay Ms Trenfield's costs of the proceedings: Frigger v Trenfield (Application to Discontinue) [2025] FCA 640 (Discontinuance Decision). Further, an order was made for the quantum of those costs to be assessed on a lump sum basis by a registrar acting as referee 'after receiving written submissions and any affidavits from the parties in accordance with a timetable set by the registrar' (Costs Order).

Application for order adopting referee report as to quantum of costs

1. A registrar has prepared a referee's report assessing the total lump sum in the amount of $295,859.82 (inclusive of GST). Ms Trenfield now applies to have the referee report adopted and an order requiring the costs payable pursuant to the Costs Order to be fixed in the amount assessed by the referee.

Grounds of opposition raised by Mrs and Mr Frigger

1. Mrs and Mr Frigger raise three matters in response. First, they say that the hearing of the application should be deferred pending resolution of certain proceedings commenced in the Supreme Court of Western Australia that were recently ordered to be transferred to this Court by Lundberg J of that Court: see Frigger v FTI Consulting (Australia) Pty Ltd [2026] WASC 32 (Transfer Decision). They say, in effect, that by those proceedings they have raised issues that, if determined in their favour, will bear upon whether Ms Trenfield has any right to claim and be paid costs pursuant to the Costs Order. One claim they make in those proceedings is that the appointment of Ms Trenfield as trustee was void ab initio. In substance, Mrs and Mr Frigger seek a stay of the adoption hearing pending the outcome of the transferred proceedings. In circumstances where no objection was raised by Ms Trenfield to such a course, I allowed the first matter to proceed as an oral application for a stay.
2. Second, Mrs and Mr Frigger advanced submissions as to why the report of the referee should not be adopted. In certain respects, those submissions concerned whether Ms Trenfield had established before the registrar as referee that Ms Trenfield had incurred the costs claimed.
3. Third, Mrs and Mr Frigger claimed that Ms Trenfield was not entitled to any costs pursuant to the Costs Order relying on the principle that costs orders are made by way of indemnity. The indemnity principle as it applies to costs orders was summarised in Harvard Nominees Pty Ltd v Dimension Agriculture Pty Ltd (in liq) [2023] FCAFC 140; (2023) 299 FCR 224 at [18] (Colvin, Steward and Feutrill JJ) in the following terms:

Costs are awarded by way of indemnity. Therefore, a party seeking a costs order must have incurred a liability to pay those costs. The indemnity principle is flexible and is designed to allow for a just and fair result: Noye v Robbins [2010] WASCA 83 at [332]‑[338] (Owen JA, Pullin and Buss JJA agreeing). The onus of establishing that a party seeking a costs order had no liability to meet a costs order lies on the party alleging that there was no liability. Further, in the absence of proof of an agreement to the contrary, the solicitor on the record for a party is taken to be entitled to look to that party for costs: Marsh v Baxter [No 2] [2016] WASCA 51 at [37] (McLure P, Newnes and Murphy JJA).

1. In support of their contention based on the indemnity principle, Mrs and Mr Frigger relied upon reasoning of Gilmour J in Director of the Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969. Respectfully, that case is no more than a particular instance of the application of the general principles to the factual circumstances in that case. I do not accept the contention advanced for Mrs and Mr Frigger that there is any relevant similarity to the facts in the present case.

An important aspect of the orders appointing the referee

1. During the hearing of the application for leave to discontinue that resulted in the Costs Order, Mrs and Mr Frigger advanced a submission to the effect that costs should not be ordered because Ms Trenfield had no liability for the costs that had been incurred and the liability for the costs of the proceedings was with FTI. In effect, it was claimed that the indemnity principle did not apply. I considered and rejected that submission: Discontinuance Decision at [70]‑[73]. I then reasoned that, as the issue of indemnity had been raised and determined, it was appropriate to make clear that any further issue as to the indemnity principle was not to form part of the referee process: Discontinuance Decision at [76]. Consequently, a further order was made in the following terms:

Any further question as to whether the indemnity principle has been met in relation to the costs the subject of the referee report shall not be considered by the registrar and shall be determined at the time of considering whether to adopt the referee report.

1. Therefore, the matters raised by Mrs and Mr Frigger concerning the indemnity principle could not form a basis upon which the referee report should not be adopted. The report itself does not deal with that issue. The referee was asked to quantify the costs incurred on a lump sum basis. Any question concerning the application of the indemnity principle was a separate matter to be determined by the Court at the time of the adoption hearing based upon any evidence advanced by Mrs and Mr Frigger to discharge their onus. Further, any such submissions would need to deal with the fact that a determination had been made rejecting submissions advanced by Mrs and Mr Frigger at the time of the discontinuance application to the effect that the indemnity principle had not been met. Those submissions had relied upon alleged aspects of the terms of arrangements between Ms Trenfield and FTI concerning the administration of the bankrupt estates.

Should there be a stay of the application to adopt the referee report?

1. As was stated in Commissioner of the Australian Federal Police v Zhao [2015] HCA 5; (2015) 255 CLR 46 at [36] (French CJ, Hayne, Kiefel, Bell and Keane JJ): '... the courts have the power to control their proceedings and to order a stay in an appropriate case. It will be appropriate to do so where the interests of justice require such an order'. The interests of justice require regard to the ordinary position that a successful litigant is entitled to enforce a judgment once obtained. That is so even where an appeal with demonstrated merit has been commenced. The burden is upon the applicant for a stay to persuade the Court that there should be a stay. There must be some identified basis to justify the making of an order. In the present case, Mrs and Mr Frigger rely upon submissions to the effect that a decision in the Supreme Court proceedings to be transferred to this Court will ultimate determine that Ms Trenfield is not entitled to recover amounts incurred as trustee of their estates.
2. No affidavit evidence was advanced by Mrs and Mr Frigger in support of the stay. They maintained that there was no need for any affidavit and they could rely upon the reasons of Lundberg J in the Transfer Decision. What is apparent from those reasons is that they seek only to describe the nature of claims made by Mrs and Mr Frigger in those proceedings for the purpose of determining whether they raise special federal matters. They do not consider the merits of those claims. There was no attempt by Mrs and Mr Frigger to explain which of the various claims made in those proceedings may call into question the entitlement of Ms Trenfield to payment under the Costs Order. Rather, the submissions were advanced at a high level of generality. They took the form of assertion that the claims made in those proceedings would, if upheld, provided a foundation for some form of order that would affect Ms Trenfield's entitlement to payment under the Costs Order on the basis that she had no authority to act as trustee, despite her appointment.
3. Of significance for that general submission is the fact that, at the time of the Discontinuance Decision, an order was also made as follows:

[Mrs and Mr Frigger] shall not commence any further proceedings in any court against [Ms Trenfield] based upon the allegations or asserting the same causes of action as those that were to be heard and determined commencing 9 June 2025, being those the subject of the minute of proposed amended application and the minute of proposed re‑amended statement of claim as were ordered on 2 July 2024 to stand as the amended application and re-amended statement of claim respectively (copies of which are appended to these orders).

1. The reasons for the making of the order about commencing further proceedings included the prejudice to Ms Trenfield of having prepared for an imminent final hearing and otherwise being exposed to the possibility of further proceedings being commenced. I express no view as to whether the proceedings that were subsequently commenced in the Supreme Court (now to be transferred to this Court) have been commenced in breach of the above order. The significant point for present purposes is that its existence adds to the importance of Mrs and Mr Frigger being able to demonstrate the way the claims they have since brought in the Supreme Court might found relief of a kind that would call into question the entitlement of Ms Trenfield to payment under the Costs Order. Further, they must explain why there must be some reason to expect those orders might be made. Further, they must be able to explain why it would be a fair balancing of the competing positions pending the outcome of the proceedings commenced in the Supreme Court for Ms Trenfield to be held out of being able to enforce the Costs Order.
2. As matters presently stand, there is a valid order of the Court made because Mrs and Mr Frigger brought Ms Trenfield to the Court and required her to prepare for a final hearing in proceedings which they then discontinued. Any stay application proceeds from the foundation that ordinarily a party is entitled to the fruits of a determination by the Court. Mrs and Mr Frigger have failed to support their application with the necessary evidence and detailed contentions to support a stay application. Even assuming that there was some basis upon which Mrs and Mr Frigger might obtain relief in the Supreme Court proceedings to be transferred to this Court to the effect that any amount paid pursuant to the Costs Order could be recovered, they do not suggest any basis for concern in being able to recover any such amount from Ms Trenfield. For those reasons, the stay application must be refused.

1. The principles to be applied when considering whether to adopt the report of a referee as stated by McDougall J in Chocolate Factory Apartments Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 at [7]‑[8] were applied by Cheeseman J in Masters v Lombe, in the matter of Babcock & Brown Limited (in liq) (Referee Report) [2025] FCA 740 at [10] and O'Bryan J in Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 5) [2025] FCA 505 at [38]. As to the principles, see also Sheehan v Lloyds Names Munich Re Syndicate Ltd [2017] FCA 1340 at [10] (Allsop CJ). Having regard to the statement of the principles in those cases, for present purposes the following aspects of an adoption hearing are of significance (adapting language from the cases cited above):

(1) An adoption hearing is not a form of hearing de novo or a rehearing.

(2) The Court has a discretion to adopt, vary or reject the report which discretion is to be exercised judicially and having regard to the object and purpose of the referee procedure.

(3) The purpose of the referee procedure would be frustrated if it were to be treated as some kind of warm up for a contest that was sought to be conducted at the adoption hearing.

(4) A referee must give reasons of a kind that enable the Court to conclude that facts as found and the opinions expressed are the result of a process of logic and the application of a considered mind, not arbitrary or influenced by improper considerations.

(5) In general, the referee's findings of fact should not be re-agitated before the Court.

(6) Determinations of questions of law and the application of the law to the facts remain matters for the Court.

(7) However, if the referee's report reveals some error of principle, absence or excess of jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason not to adopt the report.

(8) In considering whether to adopt a referee report, the Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee the evidence and submissions upon which they wish to rely.

1. As I have explained, the Costs Order required the registrar to assess the costs on a lump sum basis acting as referee and to do so after receiving written submissions and any affidavits in accordance with a timetable set by the registrar. The registrar made orders requiring the filing of a cost summary affidavit and an outline of submissions by Ms Trenfield with a costs response affidavit and submissions from Mrs and Mr Frigger.
2. Ms Trenfield filed an affidavit of Mr Smith and submissions. Mrs and Mr Frigger filed no responsive affidavit. They filed submissions which were directed to the question whether Ms Trenfield actually incurred the costs claimed. That is to say, they advanced submissions as to whether the indemnity principle was met. This was contrary to the orders that had been made.
3. Despite failing to engage with the lump sum assessment process, Mrs and Mr Frigger now seek to raise submissions as to matters addressed in the referee report as reasons why the report should not be adopted. I consider that course to be an abuse of process. As the authorities make clear, parties are not to save up points for the adoption hearing. Having been afforded the opportunity to put on evidence and submissions as to the quantum of the lump sum, and having chosen not to take up that opportunity, Mrs and Mr Frigger should not be afforded the opportunity to advance matters for the first time at the adoption hearing.
4. Nevertheless, I will briefly address what I understand to be the points raised.
5. First, it is claimed that Mr Smith's affidavit did not conform to the requirements of a costs summary affidavit as explained in the Court's costs practice note specifying those requirements. The requirement that was allegedly not met was to the effect that the deponent must verify the costs summary that the claim is not for more than the costs applicant is liable to pay for costs and disbursements. Mr Smith's affidavit included a verification on oath to that effect (see para 13). It also indicated that the amounts claimed were capable of further verification through further source materials should they be required to be produced. As I have explained, Mrs and Mr Frigger did not raise any issue about particular amounts claimed. This point has not substance.
6. Second, it was said that invoices attached to the affidavit were 'incurred' by 'JWS' (being a reference to the name of the solicitors on the record for Ms Trenfield). This submission related to the following statement in the referee's report:

[Mr Smith] calculated the total legal fees incurred by JWS between 8 June 2023 when the proceeding was commenced and 6 June 2025, when the cost order was made, by reference to the invoices (copies were attached to the affidavit). That amount was $419,210.83.

1. The point seemed to be that the reference to 'incurred by JWS' could be read as somehow indicating that it was JWS and not Ms Trenfield who had incurred the liability for the costs. This supercilious point of semantics is of no moment. Plainly, the registrar is referring to the fees charged for work undertaken by JWS acting as the solicitors on the record for Ms Trenfield in the proceedings. The registrar is not suggesting that JWS somehow was liable itself for the cost of the work that it undertook for Ms Trenfield.
2. Third, it was said that there was no evidence as to who paid the invoices for the amounts referred to by the registrar in the report. There was no need for evidence of actual payment. It was enough for Ms Trenfield to demonstrate that she had incurred the liability to pay the amounts claimed. Evidence to that effect was provided by the affidavit of Mr Smith. Further, as I have explained, issues as to whether the indemnity principle had been satisfied were to be raised at the adoption hearing.
3. Fourth, it was said that there no evidence as to why non-refundable economy airfares had been booked. This a reference to the registrar allowing recovery of airfares relating to cancelled attendance at the final hearing by reason of the late discontinuance by Mrs and Mr Frigger. There was evidence that the airfares were incurred. Otherwise, the question whether the amounts should have been allowed was a matter for the registrar and the reasoning has not been called into question in a manner consistent with the principles that apply to an adoption hearing.
4. Fifth, it was said that the registrar erred in law by finding that Ms Trenfield does not need to be registered for GST because she acted as an employee of FTI. The actual reasoning in the referee report as to that topic is as follows:

There is one matter that is raised by the applicants in passing, which I will address. The applicants say at paragraph 15 of their submissions that there is no explanation as to why Ms Trenfield is not registered for GST, which is prejudicial to their estates. My view is the circumstances of this case, there is no need for Ms Trenfield who has been sued in her own name, to explain why she is not registered for GST. It seems entirely ordinary that an individual conducting business as an employee might not be personally registered for GST.

1. I can see no legal error in that reasoning. It was not for the registrar to determine whether Ms Trenfield ought to have been registered for GST. The lump sum assessment process was not to become some kind of inquiry into conformance with tax legislation. The issue was whether, in fact, Ms Trenfield was registered for GST with the consequence that there would be an entitlement to claim input credits for GST. There is no dispute that Ms Trenfield was not registered.
2. Sixth, it was said that Ms Trenfield did not incur actual costs or disbursements because they were not billed to Ms Trenfield. As have explained, the registrar was asked to assess the lump sum amount without considering any contentions as to the indemnity principle. Having regard to the orders made, there could be no error in the report failing to address matters which might be said to affect the application of the indemnity principle.
3. Finally, in the course of oral submissions by Mrs Frigger it was suggested that there was some defect in the referee report because there had not been a statement of the findings of fact and law contended by each party and, consequently, there were no such statements appended to the report of the referee. Reliance was placed upon r 28.65(7) of the Federal Court Rules 2011 (Cth) which provides:

Each party to an inquiry must, before the time fixed by the referee conducting the inquiry, give a brief statement of the findings of fact and law contended by the party to:

(a) the referee; and

(b) any other party to the inquiry.

1. I note that r 28.65 forms part of a series of provisions empowering the referee as to the procedures that may be followed as part of the reference. They begin by providing that an inquiry must be conducted in accordance with any directions made by the Court: r 28.65(2). They then state that: 'if the Court has not made any directions about how the inquiry should be conducted, the referee may conduct the inquiry in any way the referee thinks fit': r 28.65(3). In the present case, there were directions which provided for affidavits and submissions. The referee followed those directions. In my view, considered in the context of r 28.65(2) and (3), r 28.65(7) is simply empowering a referee to fix a time for provision of brief statements of the findings of fact and law. If such a time is fixed then the party must comply within the time fixed. It is not imposing a requirement that, in every reference, there must be a statement of the findings of fact and law contended for by each party. For those reasons, I do not regard the fact that the registrar did not call for such statements in the present case (and consequently did not attach them to her report) to be a reason why the report should not be adopted.
2. For those reasons, none of the matters raised by Mrs and Mr Frigger are reasons why the referee report should not be adopted.

Have Mrs and Mr Frigger demonstrated that the indemnity principle does not apply?

1. As I have explained, Mrs and Mr Frigger did not adduce any evidence. However, they did seek to advance submissions based upon what was shown by the affidavit of Mr Smith that was before the registrar. Those submissions were to the effect that they demonstrated that the indemnity principle was not met.
2. To the extent that the submissions sought to raise matters relating to the nature of the employment relationship between Ms Trenfield and FTI, I have determined that those matters did not demonstrate that the indemnity principle had not been satisfied: Frigger v Trenfield (Application to Discontinue) [2025] FCA 640 at [70]‑[73]. Accepting that my determination was interlocutory and may be reconsidered if there has been a change in circumstances, I am not persuaded that there has been any such change demonstrated. Mrs and Mr Frigger said they wanted to rely on the affidavit of Mr Smith as new evidence. I am not persuaded that the provision of the affidavit of Mr Smith in the context of the lump sum assessment contains any material that would bear upon that previous determination.
3. The affidavit of Mr Smith attached copies of invoices for legal work that had been issued by JWS to FTI. The affidavit deposed that the invoices related to work the subject of the Costs Order and that they had been paid. It included the following statement (para 35):

JWS is entitled to charge Mrs Trenfield at the rates pursuant to a cost agreement entered into between JWS and Mrs Trenfield dated 22 May 2023, a copy of which is attached and marked 'PAS-3'. That costs agreement was subsequently clarified and varied by a letter from JWS to Mrs Trenfield dated 4 October 2023, a copy of which is attached and marked 'PAS-4'.

1. PAS-3 was a letter and terms of engagement addressed to 'Kelly Trenfield, Senior Managing Director, FTI Consulting Pty Ltd'. It was dated 22 May 2023. It began by stating:

This letter is an offer to enter into a costs agreement with FTI Consulting Pty Ltd (FTI) on the terms of this letter and the enclosed Terms of Engagement (together, our engagement terms).

1. As to the 'Scope of our engagement' the letter stated:

We will provide legal services to FTI to assist Kelly Trenfield to discharge her duties and responsibilities as trustee of the bankrupt estates of Mr and Mrs Frigger, including:

[various court proceedings not including the current proceedings and other matters]

1. The letter provided that the offer may be accepted by signing and returning a copy of the letter. It provided for a signature by Ms Trenfield. The letter was signed for JWS but there was no signature of Ms Trenfield.
2. PAS-4 was also a letter and terms of engagement from JWS to Ms Trenfield as Senior Managing Director, FTI. It was dated 4 October 2023. The letter began as follows:

This letter clarifies and varies the costs agreement set out in our letter of 22 May 2023.

This letter is an offer to enter into a costs agreement with FTI Consulting Pty Ltd (FTI) and Kelly Trenfield as trustee of the bankrupt estates of Mr and Mrs Frigger (together, you) on the terms of this letter and the enclosed Terms of Engagement (together, our engagement terms).

1. In the 'Scope of our engagement' section, the letter included an express reference to acting for 'the trustee' in responding to these proceedings. It included a statement as follows:

We note your instruction that our invoices should be issued to FTI unless we are instructed otherwise.

1. The letter also provided for acceptance and provided for a signature by 'Kelly Trenfield for herself and FTI Consulting Pty Ltd'. It too was signed for JWS but was not signed by Ms Trenfield.
2. A variation to an agreement can be expressed to take effect from an earlier date. These proceedings were commenced in June 2023. The inclusion of the express reference to these proceedings and the fact that the letter of 4 October 2023 was both by way of clarification and variation of the earlier letter leads me to conclude that it was proposed to take effect from the date of the earlier letter and to apply to fees and disbursements for the current proceedings.
3. Mrs and Mr Frigger relied upon the above matters to support two submissions. First, it was said that as the copies of the letters did not include a signature by Ms Trenfield, they showed that the offers had not been accepted and consequently there was no agreement with JWS and therefore there was no basis for the indemnity principle to be satisfied. Second, it was said that if there was an agreement it was an agreement which gave rise to a liability on the part of FTI and not on the part of Ms Trenfield and for that further reason there was no basis for the indemnity principle to be satisfied. In further support of that contention reliance was placed on the fact that the invoices produced by Mr Smith had been issued to FTI.
4. As to the first point, as I have explained, the evidentiary onus was on Mrs and Mr Frigger to demonstrate that the indemnity principle was not met. Otherwise, in the absence of proof of an agreement to the contrary, the solicitor on the record for a party is taken to be entitled to look to that party for costs. In that regard, the affidavit of Mr Smith refers to the fees claimed as having been incurred by Ms Trenfield. He has also deposed that JWS is entitled to charge Ms Trenfield pursuant to the cost agreement produced as PAS-3 as subsequently clarified and varied by PAS-4. The contention to the effect that there was only an offer and not an agreement in relation to the costs claimed was raised for the first time in the hearing of the application for orders adopting the referee report.
5. Counsel for Ms Trenfield was unable to indicate whether she had signed the letters and did not seek an opportunity to be able to clarify the position when invited to do so. He submitted that the contents of the affidavit of Mr Smith which had been produced for the purposes of a hearing before the registrar where the satisfaction of the indemnity principle was not in issue, could not be used in the manner that it was sought to be used by Mrs and Mr Frigger. That is to say, the fact that the affidavits produced versions of the letter that had not been counter-signed by Ms Trenfield did not discharge the onus on Mrs and Mr Frigger when it came to the indemnity principle. I accept that submission. I am not persuaded that the inference to be drawn from the copies of the letters produced in the context of the statements in the affidavit and the purpose for which it was produced is that there was no agreement in the terms indicated by the letters and the statements in the affidavit.
6. As to the second point, the terms of the second letter make clear that both Ms Trenfield and FTI are liable for the costs of JWS. The fact that there is a direction that invoices were to be directed to FTI and evidence that the invoices were in fact directed to FTI does not detract from the position that Ms Trenfield was also liable for those invoices. If there is a liability to pay, it does not matter that the liability has in fact been discharged by a third party and the prospect is remote that the party will be called upon to meet their liability: Marsh v Baxter [No 2] [2016] WASCA 51 at [34]‑[38]. The terms of the second letter make plain that both Ms Trenfield and FTI have incurred liabilities to JWS in respect of the costs of JWS acting for Ms Trenfield in these proceedings.
7. It follows that the contentions of Mrs and Mr Frigger as to the indemnity principle are not a basis for declining to make the orders sought.

1. For the above reasons I am satisfied that orders substantially in the terms sought by Ms Trenfield should be made.
2. Ms Trenfield sought an order for costs of the interlocutory application to be fixed. As Ms Trenfield was wholly successful, I am persuaded that such an order should be made. An order fixing costs is appropriate in the interests of efficiency and to bring to an end disputation between the parties as to costs. I will make orders which will allow for the quantum of those costs to be determined on the papers. In the interests of achieving finality in these proceedings, I will make a further order that no further documents shall be filed in these proceedings unless leave to do so has been obtained from the case managing judge.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.